The year 2023 continued to bring challenges to the residential real estate market – challenges that sellers were in many cases able to take advantage of – reported Houlihan Lawrence, the leading real estate brokerage serving New York City’s northern suburbs.
The fourth quarter real estate landscape in Westchester, Putnam and Dutchess counties saw a continued decline in home sales by approximately 21% on average, primarily due to persistent low inventories over the past few years, according to the Houlihan Lawrence Westchester-Putnam-Dutchess Q4 Market Report. But despite this – or maybe because of it – median sale prices increased across most markets, on average 9%, offering sellers favorable returns.
In the Westchester County market, single-family home sales for 2023 were down 23.7% from 2022 while median sale prices were up 4.3%. The Putnam County market reported sales down 25% compared to 2022 and median sale prices down just 1%. Dutchess County sales declined 21.2% compared to 2022 with median sale prices up 3.4%.
“Amidst the inventory scarcity, we continue to benefit from the diverse offerings of recreation, cultural amenities and vibrant communities our region has to offer,” said Liz Nunan, president and CEO of Houlihan Lawrence, which was founded in Bronxville in 1888. “Most areas have sustained heightened demand across all price points, further fueling the competitive buyer environment. However, a small sign of change has emerged with a slight uptick in inventory observed in select luxury markets, though this remains an exception rather than the norm.”
Faced with a general lack of inventory exacerbated by high interest rates, nearly all luxury markets north of New York City experienced double-digit declines in closed sales in 2023, many for the second consecutive year, according to the Houlihan Lawrence 2023 Luxury Market Report.
Still, the number of sales over $10 million in Westchester County and Greenwich were close to all-time highs in 2023. Uber-luxury sellers and buyers had the wind at their backs. Buyers at this level possessing multiple real estate holdings flexed their spending power as they pursued a well-diversified investment portfolio.
For buyers, the overall lack of inventory created competition. Luxury homes (on average) sold for close to 100% of list price. Though days on market ticked up slightly in 2023, listings sitting on the market more than 100 days were often overlooked by buyers due to price and/or presentation. Conversely, a change in price or staging often transformed a languishing listing into a desirable offering.
The report noted several trends in the luxury market. “There has been a growing interest in sustainability for luxury real estate buyers,” said Anthony P. Cutugno, senior vice president of private brokerage. “Energy efficient homes that monitor energy usage and reduce carbon footprint is one path to sustainability. Preservation is another trend of younger, eco-conscious luxury buyers purchasing period homes with the belief that the greenest home is one that is already built. Homes built before 1940 tend to be inherently environmentally sustainable, and though updates are often needed, keeping an existing structure intact is the ultimate recycling project for this group of buyers.”
Cutugno added that all eyes are on this year’s presidential election, and the effect it will have on the economy and the global landscape: “We are hopeful that the expectation of lower interest rates in the second half will help improve the trajectory of luxury real estate north of New York City.”
Indeed, the Houlihan Lawrence Westchester-Putnam-Dutchess Q4 Market Report noted that the recent statements from the Federal Reserve indicating this potential reduction in interest rates in mid-2024 may serve as a catalyst, prompting more buyers and sellers to enter the market and start to alleviate the inventory shortage.
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